Assessing the Role of Customer Service in Enhancing the Retail Banking Operations

Abstract

Against the backdrop of the active environment of retail banking, where the trend towards digitization is becoming increasingly high, and the expectations of customers are transforming significantly, the importance of customer service is studied in the given investigation. The primary aim is to evaluate to which extent responsiveness, customer satisfaction, operational efficiency, and perceived value as four service components play a role in customer loyalty and longstanding retention within the retail banking industry. The study has used Structural Equation Modelling to establish relationships by way of a 5-point likert scale questionnaire and industry statistics. The results showed that service responsiveness and customer satisfaction are major factors that determine loyalty compared to operational efficiency that has a much lower impact on loyalty. The perceived value also has its role. The model fits very well although suggestions are made to have better looking overall benefit of to the customer measuring tools. The study has recommends customer satisfaction, responsive service, and perception of value as the priorities of banks in enhancing the long-term relationship with customers and suggests that further examination should be done into the dimension of digital service and customized service.